WT/DS343/R 
 Page C-1 
 
 
  ANNEX C 
 
EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSION  
OF THE THIRD PARTIES 
 
 
CONTENTS PAGE 
Annex C - 1 Executive Summary of the First Written Submission of Brazil C-2 
Annex C - 2 Executive Summary of the First Written Submission of Chile C-7 
Annex C - 3 Executive Summary of the First Written Submission of the  
European Communities C-10 
Annex C - 4 Executive Summary of the First Written Submission of India C-15 
Annex C - 5 Executive Summary of the First Written Submission of Japan C-21 
Annex C - 6 Executive Summary of the First Written Submission of Korea C-24 
Annex C - 7 Executive Summary of the First Written Submission of Mexico C-27 
 WT/DS343/R 
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ANNEX C - 1 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF  
BRAZIL 
 
(18 May 2007) 
1. Introduction 
1. In this submission, Brazil sets out its views on the reasons why the special bonding 
requirement applied by the United States against im ports of certain frozen warm-water shrimp subject 
to anti-dumping duties, originating in Brazil, China, Ecuador, India, Thailand and Vietnam 
("Enhanced Bond Requirement" or "EBR")1 violates Articles 18.1 and 1 of the Agreement on 
Implementation of Article VI of the GATT 1994 (the  "AD Agreement") and Articles VI:2 and II:1(b) 
of the GATT 1994, or in the alternative Articles 9 and 1 of the AD Agreement.  Further, the EBR is 
not "reasonable security" under Note 1 Ad Article VI:2-3 and cannot be justified pursuant to 
Article XX(d) of the GATT 1994.     
2. The Measures At Issue  
2. Responding to a report by US Customs and Border Protection ("CBP")2 on fiscal year 2003 
uncollected anti-dumping and countervailing duties,  on 9 July 2004 CBP amended its existing Bond 
Directive governing Customs bonding requirements, and set new formulas for calculating minimum continuous bond amounts for importers of agriculture /aquaculture products subject to anti-dumping or 
countervailing duty (CVD) orders.
3  This EBR requires a bond for 10 percent of duties, taxes and fees 
paid by the importer in the prior 12 months (i.e ., the normal continuous bond amount), plus 100 per 
cent of the cash deposit rate established in the anti-dumping order (or most recent administrative 
review), multiplied by the value of the importer's en tries of that product over the previous 12 months.4  
Pursuant to a clarification issued by CBP on 10 August 2005, the EBR applies to "shrimp covered by 
anti-dumping or countervailing duty cases", the only  designated "Covered Cases" within the only 
designated "Special Category", agriculture/aquaculture merchandise.   
3. In October 2006, an in-depth examination of  the EBR by the US Government Accountability 
Office ("GAO") concluded that this bonding requi rement "represented a significant change from 
CBP's traditional method of setting bond amounts," and was "inconsisten tly implemented" as between 
shrimp importers, due to a lack of  "clear and transparent guidance".5  Days before the US Court of 
International Trade ("USCIT") issued a stinging ju dgment against CBP in domestic litigation on the 
EBR,6 CBP issued a 24 October 2006 Federal Register notice further modifying the EBR by 
identifying the factors it would consider in dete rmining, prospectively for individual importers, 
whether to reduce a bond amount.7 
                                                      
1 Frozen warmwater shrimp from Brazil, Thailand, India and these other countries subject to 
anti-dumping duties is referred to herein as "subject shrimp." 
2 Continued Dumping and Subsidy Offset Act (CDSOA) annual report for fiscal year 2003, 
Exhibit THA-11 (WT/DS343). 
3 Exhibit THA-2. 
4 Exhibit THA-5.  The EBR is specific to subject shrimp, but if any other goods were subject to the 
EBR but not to AD/CV duties, they would have no cash deposit rate, and the bond amount would be the same as 
under a normal continuous bond.     
5 Exhibit THA-10 (WT/DS343) at 7. 
6 Exhibit THA-9.   
7 Exhibit THA-5.  WT/DS343/R 
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  3. The Enhanced Bond Requirement Is Inconsistent  "As Such" With Articles 18.1 and 1 of 
the Anti-Dumping Agreement  
4. The EBR should be analyzed as a separate measure, and as constituting "specific action" 
imposed "against" dumping inconsistent with Articles 18.1 and 1 of the AD Agreement.  
(b) The Enhanced Bond Requirement Is "Specific Action" and Is Imposed "Against Dumping" 
5. As the Appellate Body stated in US – Offset Act (Byrd Amendment) , if a measure "may be 
taken only when the constituent elements of dumping . . . are present", it is a "specific action" within 
the meaning of Article 18.1.8 The CBP notices imposing or clarifying the EBR state that it applies 
only to goods subject to a US anti-dumping or CVD orde r.  Since US law only permits such orders to 
be imposed where the US authorities have determin ed that the constituent elements of dumping or 
subsidization are present, the EBR is a "specific action against dumping."   
6. The EBR corresponds to the fines on importers provided by Article 93V of Mexico's Foreign 
Trade Act, which the panel in Mexico – Anti-Dumping Measures on Rice condemned under 
Article 18.1.  That panel also found that by threatening  to impose fines on importers of a product 
subject to an anti-dumping or CVD investigation,  Article 93V provided a "specific action" not 
permitted by the AD or SCM Agreements.9 
7. The United States asserts that the E BR responds to "noncollection risk.10  Yet Customs is not 
acting against all importers whose circumstances indicate high noncollection risk-it is only acting 
against those who import subject shrimp.    
8. The EBR is specific action "against" dumping b ecause, in effect, it punishes importers for 
importing subject shrimp.  The EBR indisputably meet s the test explained by the Appellate Body in 
US – Offset Act (Byrd Amendment) . 11  It imposes a much larger bond requirement, and thus a 
significantly greater financial burden12, on certain importers simply because they import shrimp 
subject to anti-dumping measures.  Furthermore, the 10 August 2005 notice makes it clear that the 
bond requirement may be altered if the importer can show that it has ceased importing subject shrimp, 
as also acknowledged by the USCIT.13   
(c) The Enhanced Bond Requirement Is Not a Permissible Response to Dumping 
9. The EBR is also not taken "in accordance w ith the provisions of GATT 1994, as interpreted 
by [the AD] Agreement".  The only permissible responses to dumping are definitive anti-dumping 
duties, provisional measures and price undertakings—and the EBR is none of these.  It is therefore 
inconsistent with Article 18.1 of the AD Agreement.    
                                                      
8 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 239. 
9 Panel Report, Mexico – Anti-Dumping Measures on Rice , paras. 7.276, 7.278 . 
10 United States' first written submission, para. 35. 
11 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 250. 
12 The United States contends that the prohibitive cost of an enhanced bond, including the requirement 
of collateral, is a matter between the surety and the importer and not the responsibility of the United States. 
However, because surety companies must have sureties for customs bonds authorized and certified by the US 
Government in order to be permitted to write such bonds, and CBP may collect duties from the surety if the 
principal defaults, the United States has a direct interest in the amount of security required by sureties.   
13 Thailand's first written submission, para. 183. WT/DS343/R 
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  10. The EBR on subject shrimp is inconsistent with  Article 18.1 of the AD Agreement "as such".  
It is a "rule or norm" attributable to a WTO Me mber, which mandates enhanced bonding requirements 
on subject shrimp and which has general and prosp ective application on imports of subject shrimp.14   
4. The Enhanced Bond Requirement Does No t Constitute "Reasonable Security" 
Permitted by Note 1 Ad Article VI:2-3  
11. The United States places the weight of its defenc e in this dispute on the assertion that the 
EBR is a "reasonable" surety system permitted under Note 1 Ad paragraphs 2 and 3 of GATT 
Article VI.  However, the EBR falls outside the scope of the Ad Note.  The text of the Note refers to 
security for payment of anti-dumping or countervai ling duties "pending final determination of the 
facts in any case of suspected dumping or subsidi zation", i.e. the Note only applies during an anti-
dumping investigation, and does not apply beyond th e date of the final anti-dumping determination 
and order.  The US argument that the "final determ ination of the facts" does not arrive until the final 
duty assessment15 is misplaced.  The Note refers to secu rity in cases of "suspected dumping," but 
dumping is only "suspected dumping" before  the anti-dumping investigation has concluded.  The US 
imposed the EBR on importers of subject shrimp only after final anti-dumping measures were 
imposed on 1 February 2005, and over two years later the EBR continues in effect.   
12. Even assuming that the EBR falls within th e scope of the Ad Note, the EBR does not 
constitute "reasonable security" under that provision.  The use of "or" in "bond or cash deposit" in the 
Ad Note gives the importing Member a choice between either bond or cash deposit as a "reasonable 
security" – not both at once. Furthermore, the reas onableness of any "security for the payment of anti-
dumping or countervailing duties" must relate to a risk-based standard for the need for security 
against non-payment.  The decision to apply the EBR to shrimp was not based on any evidence of 
actual default; moreover, to date, CBP continues not to apply the EBR to imports with proven high 
default rates without providing any explanation, cont inues to apply the EBR to importers without any 
default history and refuses to reduce the amounts of enhanced bonds already provided.  Remarkably, 
the USCIT itself has issued a preliminary injunc tion (although only for eight importers) on the basis 
that the EBR is likely to be found "arbitrary and capricious" – confirming that the EBR is 
unreasonable.16  
5. The Enhanced Bonding Requirement is Also In consistent with Articles VI:2 and II:1(b) 
of the GATT and Article 1 of the Anti-Dumping Agreement  
13. The fees and interest costs associated with th e duplicative requirements to pay a cash deposit 
and provide an enhanced bond also have the result that the total duty burden on the importer will 
exceed the amount of the dumping margin in violation of Article VI:2 of the GATT.  Panels have 
recognized that the fees and interest costs associated  with a bonding requirement are a real cost to 
importers.17  Because the EBR is applied other than unde r the circumstances provided for in Article 
VI, it constitutes a breach by the United States of its obligations under Article 1 of the AD Agreement 
and Article VI of the GATT.  As a consequen ce, the EBR and the anti-dumping measures on subject 
shrimp are not an "anti-dumping or countervailing duty applied consistently with the provisions of 
Article VI," within the meaning of GATT Article II:2(b), and these measures therefore impose an 
"other duty or charge" in breach of US obligations under GATT Article II:1(b).   
                                                      
14 Appellate Body Report, US – Zeroing (EC),  para. 198.  See also Appellate Body Report, US – 
Zeroing (EC) , para. 188, and Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 82. 
15 United States' first written submission, para. 22. Br azil also notes the striking difference between the 
texts of Ad Note 1 ( final determination of facts ) and Article 9.3.1 of the AD Agreement, cited by the United 
States in support of its argument ( determination of the final liability for payment of anti-dumping duties ). 
16 Exhibit THA-9, p. 46-47, 53, 57-61. 
17 See, e.g., EEC – Minimum Import Prices,  para. 4.6 (accepting that in terest charges and costs in 
connection with the lodging of a security associated with  an import certificate were in excess of bound duties).    WT/DS343/R 
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  6. In the Alternative, the Enhanced Bond Re quirement is Inconsistent as such with 
Articles 9 and 1 of the Anti-Dumping Agreement   
14. In the alternative, even if the EBR is to be  analyzed together with the anti-dumping measures 
it enforces, it is inconsistent with Article 9 of the AD Agreement, because the United States is 
collecting duties in excess of the amounts permitted  thereunder. The EBR is inconsistent with 
Article 9.1, because the charges imposed by the US ar e not the "full margin of dumping or less";  with 
Article 9.2, because the anti-dumping duty collected by the United States is not collected in the 
"appropriate amounts";  and Article 9.3, because the amount of the anti-dumping duty exceeds the 
margin of dumping.  
15. In consequence, the US anti-dumping measures on subject shrimp are imposed inconsistently 
with the United States' obligations under Article 1 of  the AD Agreement.  As  a further consequence, 
the EBR and the anti-dumping measures on subject shrimp fall outside GATT Article II:2(b) and are 
in breach of GATT Article II:1(b) for the reasons set forth in the preceding paragraph.     
16. While the United States may have a right to co llect cash deposits, it has no right to require 
both a cash deposit equivalent to the full amount of the dumping margin and a bonding requirement as 
an anti-dumping enforcement measure.   
7. The Enhanced Bond Requirement Cannot be Justified under Article XX(d) of the 
GATT 1994  
17. The United States has invoked Article XX(d) of the GATT 1994 as an affirmative defence.18  
The United States bears the burden of proof to demo nstrate that all conditions of Article XX(d) are 
fulfilled.  Brazil offers the following comments on Article XX(d) without prejudice to its right to 
submit further arguments at the oral hearing.19   
(b) The Enhanced Bond Requirement Is Not "Nece ssary to Secure Compliance" Within the 
Meaning of Article XX(d) of the GATT 1994 
18. The United States has not demonstrated that the EBR satisfies the requirements of 
Article XX(d).20  The United States has done no more than  make unsubstantiated assertions that 
agriculture/aquaculture products in gene ral, or shrimp in particular, create per se  a critical risk of 
default in AD/CV duty collection.  General, abstra ct allegations such as these are insufficient to 
satisfy the burden of proof under Article XX.   
19. Moreover, the GAO's finding that when the CBP examined AD and CVD cases to evaluate 
the risk of uncollected duties, 67 per cent of the time, duty rates decreased  or stayed the same 
between the time of entry and final liquidation21, contradicts the United States' general assertion that 
there is a need to impose untargeted surety require ments to guarantee increased future duty payments. 
                                                      
18 United States' first written submission, paras. 61-77. 
19 It is not entirely clear whether the references ma de by the United States to Article XX encompass 
claims advanced by the complainants under Article 18.1 of the AD Agreement. The Un ited States simply argues 
that Article XX reinforces its allegations th at the EBR is not inconsistent with “US WTO obligations ” 
(emphasis added). Brazil proceeds, however, under the as sumption that the US defense relates exclusively to 
claims under the GATT provisions. 
20 United States' first written submission, paras. 61-77. 
21 Exhibit THA-10, at 16.  Where no administrative review of an order is requested on the anniversary 
of the order or no administrative review is conducted, liq uidation is set at the rates set by the final determination 
and order.  It is only when an administrativ e review is conducted that a rate may change. WT/DS343/R 
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  20. The United States suggests that its decision to  designate the shrimp anti-dumping orders as 
"Covered Cases" is "due in part to low capitalizat ion and high turnover rates in the industry as a 
whole"22, and a belief "that importers of agricultu re/aquaculture merchandise tended to be 
undercapitalized.23  Yet importers of agriculture and aqu aculture products do not necessarily have low 
capitalization.  Conversely, any consumer goods indu stry where the importer is a middleman rather 
than a user of the product imported is likely to be  characterized as thinly capitalized and subject to 
high turnover rates.  Thus, the US concerns do not apply to all agriculture and aquaculture importers, 
and can apply to importers in many other sectors. 
21. Even assuming that the United States can demonstr ate that particular features of aquaculture 
and agriculture imports warrant particular surety me asures, the United States had at its disposal less 
trade restrictive measures that it could reasonably employ (e.g . more frequent investigations, raising 
the cash deposit rate immediately upon making a preliminary finding in an anti-dumping 
administrative review, etc.).24   
22. Finally, Brazil recalls that as the GAO Report states, adoption of the EBR – by transferring 
the burden of higher bonds to foreign-based supplie rs – is already giving rise to results that defeat , 
rather than make a contribution to, the purpose allegedly pursued by the US Customs authorities.25 
(c) The Enhanced Bond Requirement Does Not Se cure Compliance with Measures That Are 
"Not Inconsistent" With the WTO Agreement 
23. Furthermore, the adoption of the EBR was directly related to enforcement of the Byrd 
Amendment26 in defiance of the adopted Panel and Appe llate Body reports condemning that illegal 
measure and in disagreement with the US's stated intentions to comply with the DSB's rulings and 
recommendations.27  The explicit nexus traced by the US authorities between the EBR and the Byrd 
Amendment constitutes undeniable evidence of a bi as that no legitimate reading of Article XX can 
support.  
8. Conclusions 
24. Brazil respectfully requests that the Panel find that the EBR is inconsistent as such with 
Articles 18.1 and 1 of the AD Agreement, and Articl es VI:2 and II:1(b) of the GATT 1994, or in the 
alternative with Articles 9 and 1 of the AD Agreement.   Brazil further requests that the Panel find that 
the EBR does not constitute "reasonable security" unde r Note 1 Ad Article VI:2-3 of the GATT 1994, 
and that the EBR cannot be justified under Artic le XX(d) of the GATT 1994. Brazil supports the 
request of Thailand that the Panel, pursuant to its  authority under Article 19.1 of the DSU, suggest 
that the United States bring its measure into conformity with its WTO obligations, by immediately 
releasing any bonds held by the CBP for imports of an y subject shrimp pursuant to the EBR, so that 
those imports would be secured by the normal basi c bond requirements applying to all other US 
imports.
                                                      
22 United States' first written submission, para. 27. 
23 United States' first written submission, para. 14. 
24 Thailand's first written submission, paras. 84-89. 
25 Exhibit THA-10, at p. 6.  See also Thaila nd's first written submission at p. 35, 43-44. 
26 Thailand's first written submission, paras. 94-97. 
27 Dispute Settlement Body, Minutes of the Meeting of 27 January 2003 (WT/DSB/M/142, 
6 March 2003), para. 60.  At the time the "9 July 2004 Amendment" was adopted by the US Customs authorities, 
almost 18 months had passed from the date on which the United States announced its intention to implement the 
DSB’s rulings and recommendations in the Byrd Amendment dispute.  WT/DS343/R 
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  ANNEX C - 2 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF  
CHILE 
 
(10 May 2007) 
 
1. Introduction 
1. This submission containing the grounds and le gal argument in support of Chile's position is 
made under Articles 10.2 and 10.3 of the Dispute Settlement Understanding  ("the DSU").  Chile 
makes this submission in light of its systemic inte rest in the correct application of the Agreement on 
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the "Anti-
Dumping Agreement).  
2. Thailand asserts that the United States used th e "zeroing" methodology in the determination 
of margins of dumping and applied significantly enhanced bonding requirements with respect to 
imports of certain frozen warmwater shrimp from Thailand.    
3. Chile submits, in accordance with the factua l evidence provided by Thailand, that the 
measures concerned are inconsistent with the Unite d States obligations under Articles 2.4.2. and 18.1 
of the Anti-Dumping Agreement  and Articles XI:1, I, II:2 (b), first and second sentences, and X:3 of 
the General Agreement on Tariffs and Trade 1994  (the "GATT 1994").   
(b) The USDOC's Use of Zeroing 
4. Repeated reports by panels and the Appellate Body have declared that the use of "zeroing" 
methodology during the investigations to determine ma rgins of dumping is inconsistent with Article 
2.4.2 of the Anti-Dumping Agreement. As it is described by the panel in US – Zeroing (Japan) :    
Where an authority establishes the existence of margins of dumping during the 
investigation phase by making multiple, model-by-model comparisons between 
average export prices and average normal va lues and by aggregating the results of 
those comparisons into an overall margin  of dumping, Article 2.4.2. of the AD 
Agreement requires that the results of tho se comparisons be fully taken into account 
in the numerator of the overall margin of dumping.  
5. There is a consistent line of reasoning  in the Appellate Body reports, from EC – Bed Linen  to 
US Zeroing (EC) , that holds that "zeroing" in the cont ext of the weighted-average-to-weighted-
average methodology in original investigations is in consistent with Article 2.4.2 of the Anti-Dumping 
Agreement. 
6. As Chile has submitted in past disputes, invol ving "zeroing" methodology, it is urgent that the 
United States and in particular the United Stat es Department of Commer ce (USDOC) relinquishes for 
good the application of this methodology in original  investigations and subsequent reviews in full 
implementation with the abovementioned reports.  
(c) The Enhanced Bond Requirement 
7. Article 18.1 of the Anti-Dumping Agreement  is clear in stating that no specific action against 
dumping of exports from another member can be ta ken except in accordance with the provisions of 
GATT 1994, as interpreted by the Agreement.   WT/DS343/R 
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  8. United States in paragraph 31 of its First Submission states that the Additional Bond 
Directive does not constitute a specific action against dumping because it does not meet any of the 
criteria singled out in the same paragraph:  (1) th e action is taken only when the constituent elements 
of dumping are present (i.e. it is specific to dumping) ;  (2) the action is taken "against dumping";  and 
(3) it is inconsistent with the provisions of GA TT 1994. United States explained that the additional 
bond directive serves to secure an otherwise unsecured debt owed to the US government in the form 
of assessed antidumping duties that exceed cash deposits. 
9. However, we consider that the elements provide d by the parties indicate that we are in the 
presence of a measure within the terms of Article 18. 1 of the Anti-Dumping Agreement.  The panel in 
US – Offset Act , states that all types of specific actions against anti-dumping, which are not those 
permissible under GATT 1994 as interpreted by the Anti-Dumping Agreement  (i.e. definitive anti-
dumping duties, provisional measures and price undert akings) are not permitted.  In addition, the 
Appellate Body in US – Offset Act , clarifies that the constituent elements of dumping are present 
when the measure is inextricable linked to, or have  a strong correlation with, the constituent elements 
of dumping.1    
10. In accordance with the Amendment to Bond Directive 99- 3510-004 for Certain Merchandise 
Subject to Antidumping/Countervailing Duty Cases2 and the Clarification to July 9, 2004 Amended 
Monetary Guidelines for Setting Bond Amounts fo r Special Categories of Merchandise Subject to 
Antidumping and/or Countervailing Duty Cases3, it appears clearly that the application of the 
Enhanced Bond Requirement is limited to goods  upon which USDOC has issued an anti-dumping 
order. With that, the inextricability relationship between the Enhanced Bond Requirement and the 
constituent elements of dumping is established, meet ing the specificity dimension of the measure. 
11. Regarding the requirement that the measure constitutes an specific action against  dumping, 
the Appellate Body in US – Offset Act , held that the measure:  
has an adverse bearing on, or, more specifically, has the effect of dissuading the 
practice of dumping or the practice of subsidization, or creates an incentive to 
terminate such practices.4  
12. The evidence submitted by Thailand demonstrat es that the Enhanced Bond Requirement is 
within the meaning stated by the Appellate Body. It  has an adverse bearing and serves to dissuade the 
practice of dumping by increasing the costs to importe rs, exporters, or foreign producers of importing 
the merchandise in question to the United States.   
13. Furthermore the Enhanced Bond Requirement is  inconsistent with GATT 1994. Specifically, 
Article XI:1 prohibits restrictions on importation that  do not take the form of duties, taxes or other 
charges.  We agree with the view of Thaila nd that the Enhance Bond Requirement imposes a 
restriction within the meaning of Article XI:1and it  does not constitute a duty, tax or other charge.  
The United States concedes that the bond provided takes the form of a security that does not involve a 
transfer of funds to the United States treasury.5  
14. In accordance with the elements mentioned abov e, Chile considers that the Enhanced Bond 
Requirement constitutes a specific action against dump ing, and therefore inconsistent with Article 
18.1 of the Anti-Dumping Agreement.  
                                                      
1 Appellate Body Report, US – Offset Act , para. 239. 
2 Exhibit THA – 2. 
3 Exhibit THA – 4. 
4 Appellate Body Report, US – Offset Act , para. 254. 
5 United States' first written submission, para. 10.  WT/DS343/R 
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  2. Conclusion 
15. Chile respectfully requests that the Panel does not  divert from previous and conclusive rulings 
and recommendations of the DSB and confirms that  "zeroing" is a methodology inconsistent with 
Article 2.4.2 of the Anti-Dumping Agreement  and that the Enhanced Bond Requirement is 
inconsistent with Article 18.1 of the Anti-Dumping Agreement  and Article XI:1 of GATT 1994. WT/DS343/R 
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ANNEX C - 3 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF  
THE EUROPEAN COMMUNITIES 
 
(16 May 2007) 
 
1. Enhanced Bond Requirement  
(a) Principal factual features of the EBR which affect the EC legal analysis 
1. As explained by Thailand (and not disputed by the US) the Enhanced Bond Requirement 
("EBR")1 applies in addition  to the cash deposit rate.2  Hence, the EBR is not supposed to ensure the 
collection of dumping duties assessed at the rate initially determined by the US investigating 
authorities (as the collection of these duties is ensure d by the cash deposit rate).  The EBR is designed 
to ensure collection of final anti-dumping duties that would be due in case dumping would increase 
dramatically from one year to another.3  The EBR is therefore a measure designed to address a 
hypothetical  problem in the collection of a hypothetical  dumping duty reflecting a hypothetical 
dramatic increase in dumping (up to 100 per cent ) from the level of dumping that has been initially 
determined by the investigating authorities.  
(b) Measure designed to ensure collection of an anti-dumping duty cannot be  more onerous that 
the anti-dumping duty itself 
2. In the European Communities' view, one of the main reasons behind the existence of 
Article VI GATT and the Anti-Dumping Agreement was a desire to create a set of anti-dumping disciplines acceptable to all Member s and capable of curbing the possibilities of a misuse – deliberate 
or not – of anti-dumping policies by Members.  Yet, what would be the purpose of creating these 
rather detailed and carefully balanced rules, su ch as those on the calculation of dumping margin and 
the amount of anti-dumping duty, if the effect on trade of the duties determined pursuant those rules 
could be in practice much less important that the impact of measures ensuring the collection of those 
duties? 
3. By definition, measures designed to ensure th e collection of anti-dumping duties are merely 
ancillary  to the duties themselves.  If no dumping is determined which would give a rise to an 
anti-dumping duty, there cannot be an ancillary measur e that is supposed to ensure the collection of 
such duty.  Moreover, even if a margin of dump ing is determined and a corresponding anti-dumping 
duty is assessed, the mechanism for securing the collection of that anti-dumping duty cannot impose a burden which would be greater than the duty itsel f – otherwise the Anti-Dumping Agreement would 
contain detailed rules only on the determinatio n of a collection mechanism and not on the 
determination of dumping.  
                                                     
 
 1In its first written submission, Thailand refers to a number of US measures challenged in the present 
dispute as "Enhanced Bond Requirement". The US us es, in its first written submission, another set of 
abbreviations to refer to these measures, or some of thos e measures (as the reference does not seem to be always 
consistent).  For ease of reference and to prevent co nfusion, the European Communities will refer in this 
submission to these measures, identified by Thailand , as the "Enhanced Bond Requirement" or "EBR". 
2 Thailand's first written submission, para 5, fo r instance, and Exhibit THA-2. US first written 
submission, paras 11-13. 
3 This also is confirmed by the statements made  by the US authorities. See Thailand's first written 
submission, para 73, third bullet point.  WT/DS343/R 
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  4. The temporary nature of EBR (the fact that once the margin of dumping for the period 
covered by EBR is definitely de termined and the anti-dumping duties finally collected, the remaining 
funds previously "frozen" in the enhanced bonds can be used for other purposes) does not affect this 
assessment.  To the contrary, it actually underlines it.  What sort of a temporary measure of an 
ancillary nature can be given such an effect whic h actually removes the very reason for the existence 
of and imposition the anti-dumping duties – namely the exports by dumping companies – by 
eliminating in practice these companies themsel ves (or their ability to export to the US)? 4  
(c) EBR is inconsistent with the provisions of Article 9 Anti-Dumping Agreement 
5. The European Communities recalls the far-reaching nature of the EBR: the EBR is not merely 
a "collection-ensuring mechanism", it is a measure against potential future  dumping which is put in 
place without any evidence and actual determination of dumping.  This contradicts a number of 
distinct provisions of Article 9 Anti-Dumping Agreem ent.  Article 9, as indicated in its title, sets forth 
– for the purposes of the Anti-Dumping Agreement – rules governing the imposition and collection of 
anti-dumping duties.  The first three paragraphs of Article 9 set out rules governing this issue.  
6. First, following on the precedi ng provisions of the Anti-Dumping Agreement, Article 9.1 
makes clear that the determination of a margin of dumping is an inherent pre-condition for the 
imposition of any anti-dumping duty.  At any stage, an anti-dumping duty has to be calculated and imposed on the basis of  and in correspondence to  positive evidence of dumping.  The latter element – 
the existence of a corresponding  relationship between the evidenced margin of dumping and the 
amount of duty – is also reflected in the sec ond sentence of Article 9.1 of the Anti-Dumping 
Agreement:  Members are encouraged to impose a l esser duty than the margin of dumping if such 
lesser duty would be adequate to remove the in jury to domestic industry.  However, Members 
certainly cannot, under this provision, impose a duty which would be more  than the margin of 
dumping. 
7. Article 9.2 of the Anti-Dumping Agreement confirms the above understanding.  The 
reference to "appropriate amounts" in  Article 9.2 follows on the principle set out in Article 9.1:  an 
anti anti-dumping duty imposed  (in accordance with Article 9.1) shall also be collected in appropriate 
amounts .  
8. In other words, the rule resulting from Articles 9.1 and 9.2 is that the "appropriate amounts" 
have to correspond  to the imposed duty and the duty itself has to correspond  to the margin of 
dumping (or less than the margin of dumping, if deemed  sufficient to remove injury).  This principle 
is further elaborated in Article 9.3 of the Anti-Du mping Agreement.  This provision states, in its 
chapeau , the fundamental principle that "[t]he amount of the anti-dumping duty shall not exceed the 
margin of dumping established under Article 2."  To ensure that this princi ple is respected, Articles 
9.3.1 and 9.3.2 of the Anti-Dumping Agreement set forth refund rules for both the retrospective and 
prospective systems.  The existence of these rul es makes it clear that the collected anti-dumping 
duties may temporarily  exceed the actual contemporaneous margin of dumping (as opposed to the 
margin of dumping calculated during the original in vestigation) – for example if dumping decreases. 
This is a natural implication of the technical m echanics of the dumping determination, nothing more. 
An attempt to read into these refund rules a new rule, namely one allowing a temporary increase of 
collected anti-dumping duty bearing no relation to the margin of dumping actually ascertained would 
not be based on the te xt of these provisions.
5  Both the text and context make clear that the purpose of 
Article 9.3.1 and 9.3.2 is to set forth refund rul es and not to provide a ground for a departure from the 
principles established in Articles 9.1 and 9.2 of the Anti-Dumping Agreement.  
                                                      
4 See, for instance, Thailand's first written submission, paras 121 et seq. 
5 It seems that the US might actually be taking this position (cf. United States first submission, para 23). WT/DS343/R 
Page C-12 
 
 
  9. To summarize: the EBR attempts to ensure th e collection of an anti-dumping duty for which a 
margin of dumping has not at all been established.  In that respect, the measure directly violates 
Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping Agreement.  
10. The European Communities also notes that Thailand argues that the EBR is not an 
anti dumping "duty".6  Irrespective of whether EBR is seen as a "part" of a provisional duty collected 
or as something else, the legally significant aspect is that the EBR distorts, in a very rampant way, the 
balance reached in the provisions of Article 9.  The European Communities also does not take the 
view that the drafters chose to leave out the ques tion of the adequateness of security for the collection 
of anti-dumping duty outside the scope of the Anti-Dumping Agreement.  The applicable rules are 
embodied in the provisions of Article 9 discussed above.  
(d) Ad Note to paragraphs 2 and 3 of Article VI  GATT confirms that EBR violates Article VI:2 
GATT and the Anti-Dumping Agreement 
11. The European Communities is of the view that  EBR is prohibited by Article VI:2 GATT for 
the same reasons as discussed above :  the EBR requires a surety with respect to anti-dumping duties 
based on dumping which had not yet been determined a nd, in fact, had not occurred. The Ad Note to 
paragraphs 2 and 3 of Article VI  GATT confirms this conclusion as it allows a Member to "require 
reasonable security (bond or cash deposit) for th e payment of anti-dumping or countervailing duty 
pending final  determination of the facts in any case of suspected dumping or subsidization."7  In many 
respects, this provision addresses the very matte r at issue.  The EBR is not a "security … pending  
final determination of the facts".  As the European  Communities mentioned at the outset, the EBR is 
targeted at a potential future dramatic increase (up to 100 per cent ) in dumping beyond  the level of 
the dumping incurred in the past assessment period.  Hence, in contrast to a cash deposit applied by 
the US, the EBR is not a security required pending  the final determination of the facts in a case of 
suspected dumping.  A "final determination" implie s that there already has been a preliminary or 
initial determination of dumping which is then veri fied – and, if necessary, adapted – and becomes 
final.  Yet, when EBR is applied, there is no prel iminary or initial determination of the facts of 
dumping with respect to the dramatically increased dumping that is addressed by EBR. 
(e) Article 7.2 Anti-Dumping Agreement confirms that security cannot exceed the margin of 
dumping  
12. In the preceding section, the European Communiti es explained that EBR violates Article 9 as 
it attempts to ensure the collection of duties d esigned to offset dumping which has not yet occurred 
and has not been established.  This view is furthe r confirmed by Article 7.2 Anti-Dumping Agreement.  
While this provision relates to provisional measures,  the principle holds equally well with respect to 
the issue at hand:  if there is a margin of dum ping determined, and if there is a duty assessed on the 
grounds of that margin, then a security can be requested that, however, has to correspond to the 
amount of that duty .  In other words, the security cannot be determined in the absence of a margin of 
dumping and duty determination.  If this rule were  not applicable beyond the stage of preliminary 
measures, then one would end up with a rather absu rd result:  one would have to accept that the Anti-
Dumping Agreement for some reason only protects th e preliminary phase against a misuse and that 
the main and principle part of the anti-dumping regime, which can and does last for years, is fully open to all kinds of measures which can bypass the anti-dumping duty and be, as far as their effect is 
concerned, much more onerous.  
                                                     
 
6 Thailand's first written submission, paras 203 – 210. 
7 Emphasis added.  WT/DS343/R 
 Page C-13 
 
 
  (f) EBR violates Article 18.1 Anti-Dumping Agreement 
13. Like Thailand, the European Communities is also  of the view that EBR is a "specific action 
against dumping" which is not permitted by Article 18.1 of the Anti-Dumping Agreement.  Instead of 
repeating the arguments made by Thailand, however , the European Communities would limit itself to 
pointing out a few factual and legal aspects of the EBR which it considers particularly relevant.  First, 
in the European Communities' view, there can be no doubt that the EBR is a "specific" action against 
dumping. As the European Communities mentioned above, the EBR is a measure ancillary to the 
anti dumping duties, not the other way round.  Without an anti-dumping proceeding and an initial finding of dumping, the EBR would/could not be im posed and, in fact, would be without purpose. 
Second, there is no doubt that the EBR is a specific action "against" dumping.  The European 
Communities recalls that under the Appellate Body case law, the legal test in this respect should focus 
on dumping (or subsidization) as "practices"
8 and, particularly, on the assessment of "whether the 
design and structure of a measure is such that th e measure … has an adverse bearing on … or, more 
specifically, has the effect of dissuading the pr actice of dumping … or creates an incentive to 
terminate such practices".9  The effect of the measure in question on the competitive position of the 
domestic industry vis-à-vis their foreign competitors subject to anti-dumping duties is at least one of 
the elements in the above test.10  The harmful effects of EBR on the competitors of the US domestic 
industry have been well documented in the submission of Thailand.11  
(g) Other claims raised by Thailand and alterna tive measure ensuring collection of anti-dumping 
duties 
14. The European Communities does not address other cl aims raised by Thailand in detail as it 
believes that a Panel finding made under the legal pr ovisions discussed in the preceding sections of 
this submission (i.e., provisions which pertain sp ecifically to dumping) would correspond to and 
address more pertinently the problem at issue.  For the sake of comple teness, the European 
Communities notes, however, that it disagrees with the US view that the EBR can be justified under 
Article XX(d) GATT.12  In particular, contrary to what the US argues, the EBR is not "necessary  to 
secure compliance" with US anti-dumping duty laws.  Alternative measures, su ch as variable duties, 
are reasonably available13 and, if adopted, would lead to a c onsiderably less onerous and restrictive 
impact upon trade.   
2. The Anti-Dumping Measure 
15. The European Communities notes that the US acknowledged that US DOC used in the case 
referred to by Thailand the same zeroing methodology as was used in the US – Zeroing (Ecuador)  
case and that it did not put forward any arguments jus tifying the use of this methodology. There is no 
question that the Panel should consider itself bound by what is now a well established case law on the 
issue and find that the US violated its obligations under Article 2.4.2 of the Anti-Dumping Agreement.  
3. Conclusion 
16. The European Communities is of the view th at the EBR, as challenged by Thailand, is 
inconsistent with Articles 9.1, 9.2, 9.3, 9.3.1 and 18.1 of the Anti-Dumping Agreement and with 
Article VI:2 GATT including the Ad Note to Paragr aphs 2 and 3 of Article VI GATT.  The European 
                                                      
8 US – Offset Act (Byrd Amendment) , Appellate Body Report, para 253. 
9 US – Offset Act (Byrd Amendment) , Appellate Body Report, para 254. 
10 US – Offset Act (Byrd Amendment) , Appellate Body Report, para 256. 
11 See, for instance, Thailand's first written submission, paras 121 et seq. 
12 United States' first written submission, paras 61 et seq . 
13 United States' first written submission, para 70. WT/DS343/R 
Page C-14 
 
 
  Communities is also of the view that the Anti-Dumpi ng Measure is inconsistent with Article 2.4.2 of 
the Anti-Dumping Agreement.  
  WT/DS343/R 
 Page C-15 
 
 
  ANNEX C - 4 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF  
INDIA 
 
(20 May 2007) 
1. Zeroing. 
(a) "Zeroing” is inconsistent with Article  2.4.2 of the Anti-Dumping Agreement 
1. India has consistently opposed the use of zeroing methodology in calculating dumping 
margins beginning with the dispute that it in itiated against the European Communities in EC - Bed 
Linen .  The findings of the Appellate Body in that  dispute have been confirmed and extended in 
subsequent panel and Ap pellate Body reports. 
2. In its first written submission, Thailand no tes that the zeroing methodology used by the 
United States in calculating dumping margins of Thai exporters of subject shrimp1 is identical to that 
found to be inconsistent with Article 2.4.2 of the Anti-Dumping Agreement in US – Softwood 
Lumber V .  Thailand relies on the repeated findings in pa nel and Appellate Body reports that zeroing 
is inconsistent with Article 2.4.2 of the Anti-Du mping Agreement.  Thailand also relies on a recent 
report in US – Shrimp (Ecuador)  where the Panel found that the zeroing methodology used by United 
States to calculate dumping margins is inconsis tent with Article 2.4.2 of the Anti-Dumping 
Agreement.  In its first submission, the United Stat es has conceded that the same type of zeroing as in 
US – Shrimp (Ecuador)  has occurred in the investigation of s ubject shrimp from Thailand and that "… 
a measure using a similar calculation was the subject of the Softwood Lumber  report and the DSB 
ruled that the measure was inconsistent with Article 2.4.2, first sentence, becau se of that calculation".  
India considers, therefore, that Thailand has discharged its burden of making a prima facie case 
establishing the inconsistency of the zeroing me thodology used by the United States with its 
obligations under Article 2.4.2 of the Anti-Dumping Agreement. 
2. The Enhanced Bond Requirement. 
(a) The Enhanced Bond Requirement is inconsiste nt with Article 18.1 of the Anti-Dumping 
Agreement. 
3. The Enhanced Bond Requirement constitutes an  impermissible "specific action" against 
dumping that is inconsistent with the obligations  of the United States under Article 18.1 of the Anti-
Dumping Agreement.  According to the Appellate Body ruling in  US – Offset Act , a three-step 
analysis is necessary to determine whether a meas ure constitutes impermissible specific action against 
dumping.  The two basic conditions precedent are that the measure must be (a) "specific" to dumping, 
and (b) "against" dumping.  If these two conditions ar e met, it is necessary to determine whether the 
measure has been taken in accordance with the provisions of Article VI of the GATT 1994 as 
interpreted by the provisions of the Anti-Dumping Agreement. 
4. The Enhanced Bond Requirement is "specific" to dumping because it applies only to 
importers of designated merchandise that is s ubject to anti-dumping duties, i.e., when all the 
conditions for imposition of anti-dumping duties have been fulfilled.  As the United States itself has admitted in US- Offset Act , a measure such as the Enhanced Bond Requirement that "… imposes … 
liability on importers/producers/ exporters when dumping … is found …" will constitute "specific 
action" with respect to dumping.  In addition, one  important element of the formula for calculating the 
                                                     
 
1 Terms used but not defined in this Executive Summary of the third party submission of India have the 
meanings assigned to them in the first written submission of Thailand in this dispute. WT/DS343/R 
Page C-16 
 
 
  bond liability amount is the amount of anti-dumping duties owed based on the dumping margin.  
Moreover, one of the stated purposes of the Enha nced Bond Requirement is to ensure that anti-
dumping duties are collected for payment to domestic industry under the Byrd Amendment, which the Appellate Body has found to be a "specific action" against dumping.  Regulations or administrative 
procedures by CBP to implement the Byrd Amendment such as the Enhanced Bond Requirement also, 
therefore, constitute specific action against dumping or subsidization.  Therefore, there is clearly an 
inextricable link between the Enhanced Bond Requi rement and the constituent elements of dumping. 
5. Further, the Enhanced Bond Requirement also cl early acts "against" dumping.  It has a serious, 
adverse impact on importers and, therefore, on dumping.  The demand of 100 per cent collateral by 
sureties acceptable to CBP to issue enhanced bonds and high bond premiums and other charges 
impose a heavy burden on importers .  The bonds initially posted inevitably get saturated before the 
first administrative review and liquidation are comple ted.  As a result, importers are forced to post 
additional enhanced bonds, which results in further charges and further depletion of their capital and 
credit.  Thus, as found by the USCIT, importers suffer serious losses in profits and business opportunities.  This has a serious deterrent effe ct on exports subject to the Enhanced Bond 
Requirement as is evident from the sharp drop be tween 2005 and 2006 in the quantity and value of 
subject shrimp exported from India as well as in  the total number of exporters from India. 
6. The last step in the analysis is to determ ine whether the Enhanced Bond Requirement accords 
with the requirements of Article VI of the GATT 1994 as interpreted by the provisions of the 
Anti-Dumping Agreement.  In US –1916 Act , the Appellate Body found that the Anti-Dumping 
Agreement limits the permissible responses to dumping to (a) definitive anti-dumping duties, 
(b) provisional measures and (c) price undertakings.  By definition, the Enhanced Bond Requirement 
does not involve the collection of a definitive anti- dumping duty or a price undertaking by exporters.  
It is also not a provisional measure to the extent that  it is applied (a) in addition to, and on top of, the 
provisional measures contemplated by Article 7 of the Anti-Dumping Agreement, and (b) even after 
the provisional measures contemplated by these prov isions have run their c ourse and the decision to 
impose definitive duties has been taken.  Acco rdingly, the Enhanced Bond Requirement is 
inconsistent with the obligations of the Un ited States under Article 18.1 of the Anti-Dumping 
Agreement. 
7. Further, the United States cannot rely on footnote 24 to the Anti-Dumping Agreement to 
justify the Enhanced Bond Requirement under other provisions of the GATT 1994.  Footnote 24 qualifies Article 18.1 of the Anti-Dumping Agreement by stating that it is not "…intended to preclude 
action under other relevant provisions  of GATT 1994, as appropriate."  In US – Offset Act , the 
Appellate Body clarified that these provisions only "…  confirm what is implicit in Article 18.1 of the 
Anti-Dumping Agreement  …, namely, that an action that is not ‘specific’ within the meaning of 
Article 18.1 of the Anti-Dumping Agreement …, but is nevertheless related to dumping …, is not 
prohibited by Article 18.1 of the Anti-Dumping Agreement ".  Therefore, a measure that constitutes 
specific action against dumping cannot be justified under footnote 24.  The Enhanced Bond 
Requirement clearly constitutes specific action against dumping.  Accordingly, the United States 
cannot justify it under any other provision of the GATT 1994. 
(b) The Enhanced Bond Requirement is inconsistent with Articles 9.1, 9.2, 9.3 and 9.3.1 of the 
Anti-Dumping Agreement.   
8. Under Article 9.1 of the Anti-Dumping Agreement, the decision to impose definitive duties 
follows upon an affirmative finding of dumping and of consequent injury.  Under Article 9.2 of the 
Anti-Dumping Agreement, the only measure that ma y be taken as a result of the decision to impose 
definitive duties under Article 9.1 is that duties sh all be collected in the "appropriate amounts".  
Further, under Article 9.3, the amount of the duty shall not exceed the "margin of dumping".   WT/DS343/R 
 Page C-17 
 
 
  Therefore, it is clearly impermissible to demand an  enhanced bond in addition to the duties collected 
in an amount equal to the dumping margin. 
9. The United States cannot justify the Enhanced B ond Requirement on the basis that it follows 
the retrospective system of assessment referred to in Article 9.3.1 of the Anti-Dumping Agreement.  
Article 9.3.1 clarifies that the "final liability" for anti-dumping duties will be fixed at the stage of 
administrative review and that any refund must be made normally within a period of 90 days from the 
determination of the final liability.  The terms "f inal liability" and "refund" in Article 9.3.1 of the 
Anti-Dumping Agreement have the following implications.  First, there must be a prior liability that is 
not "final", which can only refer to the liability fixed at the time of the imposition decision in 
Article 9.1.  Second, it is permi ssible under Article 9.3.1 for the Unite d States to collect higher anti-
dumping duties after the administrative review under Article 9.3.1 than were collected under Article 
9.2 consequent upon the imposition decision taken under Article 9.1.  Third, Article 9.3.1 could not 
have contemplated a refund unless some amounts have already been collected prior to the 
determination of the final liability.  However, th e duties may be collected only "in the appropriate 
amounts" consequent upon the imposition decision in Article 9.1.  Lastly, the absence of any 
reference to a discharge of bonds in Article 9. 3.1 (unlike in Articles 10.4 and 10.5 of the Anti-
Dumping Agreement) confirms that no measure ot her than the collection of definitive anti-dumping 
duties in "appropriate amounts" is contemplated af ter the imposition decision in Article 9.1 and prior 
to the determination of final liability in Article 9. 3.1.  Even by implication, however, Article 9.3.1 
does not confer any special right on Members that  choose to follow the retrospective assessment 
system to take any measure after the imposition d ecision in Article 9.1 othe r than to collect anti-
dumping duties. 
10. The ordering of the paragraphs of Article 9 of the Anti-Dumping Agreement makes it clear 
that Articles 9.1 and 9.2 also govern the retrospectiv e assessment system.  That Article 9.3 and Article 
9.3.1 follow after Article 9.2 does not mean that so me additional right to take security exists in the 
case of retrospective assessment systems.  In f act, the first sentence of Article 9.3 prohibiting 
collection of duties in excess of the dumping marg in qualifies the "appropriate amounts" in which 
anti-dumping duties may be collected under Article 9.2. 
11. Moreover, it is important to keep in mind the policy consequences of conceding any right to 
take enhanced bonds that is not governed by the strict disciplines contained in the Anti-Dumping 
Agreement.  Members may well demand a continuo us bond amounting to 200 per cent or 300 per cent 
of anti-dumping duties payable on imports for the immediately preceding one-year period.  Therefore, 
the Enhanced Bond Requirement is inconsistent with the provisions of Articles 9.1, 9.2, 9.3 and 9.3.1 
of the Anti-Dumping Agreement. 
(c) The Enhanced Bond Requirement is inconsis tent with Article 7 of the Anti-Dumping 
Agreement. 
12. The Enhanced Bond Requirement cannot be ju stified under Article 7 of the Anti-Dumping 
Agreement.  Under Article 7.1(iii), it is necessary that  "the authorities concerned judge such measures 
necessary to prevent injury being caused during the investigation".  The stated reasons for introducing 
the Enhanced Bond Requirement do not mention injury being caused during the investigation and focus on ensuring that payments are made to domes tic industry pursuant to the Byrd Amendment.  
Therefore, if the Enhanced Bond Requirement is  a provisional measure, it is inconsistent with 
Article 7.1(iii) of the Anti-Dumping Agreement. 
13. The Enhanced Bond Requirement is also incons istent with Article 7.2 of the Anti-Dumping 
Agreement.  A provisional measure may not be for an amount in excess of the "provisionally estimated margin of dumping".  However, under the Enhanced Bond Requirement, importers are 
required to provide an enhanced bond for an am ount equal to the anti-dumping duties payable on WT/DS343/R 
Page C-18 
 
 
  imports for the previous year rather than a single-entry bond for the amount of anti-dumping duty 
owed on each shipment. 
14. Moreover, Article 7.4 of the Anti-Dumping Agreement provides for limiting a provisional 
measure to a maximum period of six months.  To th e extent that the Enhanced Bond Requirement on 
importers is introduced or remains in place on a ny date after six months from the date on which 
provisional measures are first imposed, the Enha nced Bond Requirement  constitutes a clear 
inconsistency with the pr ovisions of Article 7.4. 
(d) The Enhanced Bond Requirement is inconsistent  with Note 1 to Paragraphs 2 and 3, Ad 
Article VI. 
15. India considers that the United States cannot rely upon the Note 1 to Paragraphs 2 and 3, Ad 
Article VI to justify the Enhanced Bond Requirement  independently of Article 7 of the Anti-Dumping 
Agreement.  In fact, it is clear that the "reasonable security (bond or cash deposit)" referred to in Note 
1 to Paragraphs 2 and 3, Ad Article VI is the same  as the provisional measures referred to in Article 7 
and that this provision merely elaborates upon Note  1 to Paragraphs 2 and 3, Ad Article VI and 
imposes further disciplines in this regard.  The final determination of the facts referred to in Note 1 to 
Paragraphs 2 and 3, Ad Article VI  can only be at the stage of the decision to impose definitive anti-
dumping duties under Article 9.1.  Thus, Note 1 to  Paragraphs 2 and 3, Ad Article VI does not 
constitute a "general exception" in Article VI of the GATT 1994 that operate s independently of the 
disciplines in Articles 7 and 9. 
16. Further, the requirement in Note 1 to Paragra phs 2 and 3, Ad Article VI that any security 
taken must be "reasonable" is clearly not satisfi ed in the case of the Enhanced Bond Requirement 
because the enhanced, continuous bond must be furnis hed in addition to maki ng cash deposits at the 
duty rates specified in the Order.  Therefore, th e Enhanced Bond Requirement imposed by the United 
States is per se  unreasonable.  In addition, the Enhanced Bond Requirement is clearly not reasonable 
because it was motivated by political considerations.  Further, the designation of products by CBP is 
also arbitrary and capricious.  CBP does not cite a single reason as to why there is a likelihood of a 
higher rate of default in collection of anti-dumping duties on imports of subject shrimp as opposed to 
imports of other agricultural or aquacultural mercha ndise.  As imports of subject shrimp were not 
liquidated, there was no evidence of default by impor ters of subject shrimp at the relevant time.  
Further, CBP at no time has offered any explanatio n of why importers of crawfish or garlic from 
China were not subject to the Enhanced Bond Requirement.  It is clear also that CBP does not engage in any analysis of the likelihood of an increas e in dumping margins which is the ostensible 
justification for applying the Enhanced Bond Requi rement to merchandise subject to anti-dumping or 
countervailing duties.  
17. Moreover, the extent of the security dema nded under the Enhanced Bond Requirement is 
clearly excessive.  As the USCIT found, the effect s of imposition of the Enhanced Bond Requirement 
include (a) a serious depletion of the credit of im porters, (b) dropping or scaling back on product lines 
imported into the United States, (c) preventing the addition of new product lines, (d) causing the loss 
of spot sales, (e) preventing participation in bids  from major supermarket chains, (g) forcing imports 
of subject shrimp on a delivered, duty-paid basis, t hus reducing profit margins, (h) adversely affecting 
customer and supplier relationships, and (i) inability to  fulfil  contractual orders.  The extent of the 
harm suffered as a result of the Enhanced Bond Re quirement is evidence of its unreasonableness. 
18. In fact, until the publication of the 24 Octobe r 2006 Notice in the Federal Register, CBP did 
not take account of the financial soundness of indi vidual importers at all, which presumably should 
have been its primary concern in imposing the Enhanced Bond Requirement.  This is an obvious 
indicator of the extreme unreasonableness both in c onception and in administration of the Enhanced 
Bond Requirement.  Although CBP now claims that it will take into account the financial soundness  WT/DS343/R 
 Page C-19 
 
 
  of individual importers in fixing the amount of the e nhanced bond, they have also clarified that they 
will not apply this analysis pending liquidation to im porters of subject shrimp to reduce the value of 
enhanced, continuous bonds already furnished.  A ccordingly, India considers that the Enhanced Bond 
Requirement is inconsistent with the provisions of Note 1 to Para graphs 2 and 3, Ad Article VI. 
(e) The Enhanced Bond Requirement is inconsiste nt with Article X:3(a) of the GATT 1994. 
19. India submits that the Enhanced Bond Requireme nt is inconsistent with Article X:3(a) as 
applied to subject shrimp because it has not been ad ministered in a uniform, impartial and reasonable 
manner as discussed above.  It has been applied onl y to importers of subject shrimp from the six 
countries subject to anti-dumping duties and not to other importers.  Therefore, the Enhanced Bond 
Requirement is clearly inconsistent with the requi rements of Article X:3(a) as applied to subject 
shrimp. 
(f) The Enhanced Bond Requirement is inconsistent with Articles I and II:1(a) and II:1(b) of the 
GATT 1994. 
20. To the extent that the Enhanced Bond Require ment can be characterized legally as involving 
duties, taxes or other charges, India submits that it is inconsistent with the obligations of the United 
States under Articles I:1 and II:1(a) and II:1(b) of the GATT 1994.  The Enhanced Bond Requirement 
certainly involves charges by US surety companies,  is "a method of levying … duties", and represents 
a "rule" and "formality" in connection with importation. "  Therefore, it is clearly subject to the most-
favoured nation obligation in Article I:1 of the GA TT 1994.  To the extent that the Enhanced Bond 
Requirement is applied in a discriminatory manner, th erefore, to only those Members that are subject 
to anti-dumping duties in respect of certain designate d merchandise, it is clearly inconsistent with the 
obligations of the United States under Article I:1 of the GATT 1994. 
21. Again, to the extent that the Enhanced B ond Requirement necessarily involves payment of 
(high) charges to US surety companies, it cons titutes an inconsistency with the second sentence of 
Article II:1(b), which provides that the "… products [d escribed in Part I of the Schedule] relating to 
any [Member] shall also be exempt from all other … charges of any kind imposed on or in connection 
with the importation in excess of those imposed on th e date of this Agreement or those directly and 
mandatorily required to be imposed thereafter by legisl ation in force in the importing territory on that 
date." 
22. The duties associated with the Enhanced B ond Requirement are not anti-dumping duties 
authorized under the provisions of Article VI of  the GATT 1994 or the Anti-Dumping Agreement.  To 
the extent that the Enhanced Bond Requirement resu lts in an increase in "contingent tariff liability" 
above bound levels for Members subject to anti- dumping or countervailing duties, therefore, the 
Enhanced Bond Requirement is inconsistent with the obligations of the United States under 
Article II:1(a) and the first sentence of Article II: 1(b) of the GATT 1994.  Moreover, the increase in 
contingent tariff liability is only in respect of cer tain Members whose merchandise is subject to the 
Enhanced Bond Requirement.  Therefore, it is also  inconsistent with the "most-favoured nation" 
treatment obligation of the United States under Article  I:1 of the GATT 1994.  It is important to note 
that the bound rate for shrimp falling under tariff headings 0306.1 3.00 and 1605.20.10 in the Schedule 
of Concessions of the United States is "0.0%".  Therefore, the Enhanced Bond Requirement is inconsistent with Articles I, II:1(a) a nd II:1(b) as applied to subject shrimp. 
(g) In the alternative, the Enhanced Bond Requireme nt is inconsistent with Article XI of the 
GATT 1994. 
23. Alternatively, to the extent that the Enhanced  Bond Requirement may be legally characterized 
as an import restriction and not as a "duty, tax or other charge," it is clearly inconsistent with WT/DS343/R 
Page C-20 
 
 
  Article XI:1 of the GATT 1994 and is not saved by any of the exceptions contained therein.  The 
Enhanced Bond Requirement operates in a manner th at severely restricts imports into the United 
States of merchandise subject to anti-dumping or count ervailing duties.  Accordingly, to this extent, 
the Enhanced Bond Requirement is inconsis tent with Article XI:1 of the GATT 1994. 
3. Conclusion 
24. For the reasons stated above, India requests that the Panel find that (a) the zeroing 
methodology followed by the United States is inconsiste nt with its obligations under Article 2.4.2 of 
the Anti-Dumping Agreement; and (b) the Enhanced  Bond Requirement is in consistent with the 
provisions of Articles 7.1, 7.2, 7.4, 9.1, 9.2, 9.3, 9.3.1 and 18.1 of the Anti-Dumping Agreement, of 
Article X:3(a) of the GATT 1994 and of (i) Articles I:1 and II:1(a) and II:1(b) or (ii) alternatively, of 
XI:1 of the GATT 1994.   
  WT/DS343/R 
 Page C-21 
 
 
  ANNEX C - 5 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF  
JAPAN 
 
(18 May 2007) 
1. Introduction 
1. This dispute brought by Thailand is about the Enhanced Bond Requirement (the "EBR") on 
certain products subject to antidumping or countervailing duties introduced by the United States.  
Thailand questions the WTO consistency of this measure on imports of certain frozen warmwater 
shrimp from Thailand in light of various provisi ons under the AD Agreement and the GATT 1994.  In 
this submission, Japan, as a third party, would like to focus on the following two issues based on its 
systemic interest in the interpretation of these agr eements ensuring fair and objective application of 
them: 
– whether the EBR constitutes specific action ag ainst dumping that is inconsistent with 
Article 18.1 of the AD Agreement; and 
– whether the EBR is inconsistent with the Ad Note 1 to paragraphs 2 and 3 of Article VI 
of the GATT 1994. 
2. Arguments 
(a) Consistency of the EBR with Article 18.1 of the AD Agreement prohibiting specific actions 
against dumping other than those permitted under the AD Agreement  
2. Thailand submits that the EBR constitutes an impermissible specific action against dumping 
under Article 18.1 of the AD Agreement.   
3. The Appellate Body stated that a Member's  measure constitutes a specific action against 
dumping, where:  (1) the measure is "specific" to dumping;  (2) the action is taken "against" dumping, 
i.e., to counteract dumping; and (3) it is in consistent with the provisions of GATT 1994 , as interpreted 
by the AD Agreement.1  An action is "specific" where it is "inextricably linked to, or have a strong 
correlation with, the constituent elements of dumping."2  An action is taken "against" dumping if the 
action "has the effect of dissuading the practice of dumping."3 
4. Regarding the "specific" requirement, Japan considers that the Panel should examine under 
what situations the EBR is imposed to see whethe r and how the measure is linked to the "constituent 
elements" of dumping.  In Japan's view, to meet this requirement, it would be necessary that the EBR 
is imposed only where dumping is found to exist.  In this connection, it appears that the bond 
requirement in question is required only where th e United States found the existence of dumping, i.e ., 
constituent elements of dumping.  Any additional re quirements, such as the risk of non-collection for 
individual importers, would not change such basic characteristics of the EBR. 
5. Regarding the "against" requirement, the Panel should examine at least the purpose as well as 
the design and structure of the EBR, and its eff ect, that is, how the bond requirement would reduce 
shipments from subject countries.  In particular, th e United States admits that the EBR is to secure 
                                                      
1 See Appellate Body Report, US –Offset Act (Byrd Amendment),  WT/DS217/AB/R, WT/DS234/AB/R, 
adopted 27 January 2003, para. 236. 
2 Ibid., para.239. 
3 Ibid.,   para.254. WT/DS343/R 
Page C-22 
 
 
  future duty collection in case that "the anti dumping duty rate actually assessed increase from that 
determined during the investigation."4  By definition, the antidumping duty is a measure "against" 
dumping.  As the bond requirement in question is a measure to complement the imposition of antidumping duty, it must be a measure "against" dumping. 
6. The United States argues that the EBR is not an action "against" dumping, but "is designed to 
secure antidumping liability" only becau se "the vast majority of unsecure d liability that has resulted in 
noncollection happens to be antidumping duty liability."
5  The United States also argues that it is just 
a third party beneficiary and "is not itself a party to the contract" with a surety.6  There is no dispute, 
however, that the EBR is an action taken by the United States to collect antidumping duty only with 
respect to imports for which dumping was found.  As  discussed above, the bond requirement at issue 
must be a "specific action against dumping". 
7. In such case, the Appellate Body clarifies that the permissible action under Article 18.1 of the 
AD Agreement is limited to the imposition of (i) definitive anti-dumping duties, (ii) provisional 
measures, or (iii) price undertakings.7  The EBR is not either one of these three measures, and 
therefore impermissible under Article 18.1 of the AD Agreement.    
8. The United States argues that the EBR is merely "related to" dumping or subsidies8, and 
therefore permissible.  The United States then re lied on the statement of the Appellate Body that 
footnote 24 of the AD Agreement  and footnote 54 of the SCM Agreement is to confirm that "an 
action that is not ‘specific' within the meaning of Article 18.1 of the Anti-Dumping Agreement and of 
Article 32.1 of the SCM Agreement, but is neverthe less related to dumping or subsidization, is not 
prohibited" by those Articles.9  As the bond requirement in question is "specific" action against 
dumping or a subsidy as discussed above, the requi rement would not be justified by any other 
provisions of GATT 1994.  
(b) Permissibility of the Enhanced B ond Requirement under the Ad Note 
9. The United States argues that the Ad Note 1 to  paragraphs 2 and 3 of  Article VI of the 
GATT 1994 justifies the EBR,10 arguing that the EBR is "security against the prospect of a future 
liability."11  Thailand considers that the measure which the Ad Note contemplates is the provisional 
measure provided in Article 7 of the AD Agreement .12  The United States rebuts that the bond 
requirement at issue is imposed  pending determination of the  final liability for payment of duties .  
According to the United States, in the context of its retrospective duty assessment system, the 
language "final determination of the facts" in the Ad Note means "determination of the  final liability 
for payment of anti-dumping duties."13  Based on the following consider ation, Japan is of the view 
that the "reasonable security" permitted under the Ad Note purports the provisional measures, which 
are articulated in Article 7 of the AD Agreem ent or Article 17 of the SCM Agreement.  
10. First, the language "pending final determination of the facts" in the Ad Note must be read in 
the context of the subseque nt language "in any case of suspected dumping or subsidization" (emphasis 
                                                      
4 United States' first written submission, para.13. 
5 Ibid., para. 34. 
6 Ibid., para. 7. 
7 See Appellate Body Report, United States – Anti-Dumping Act of 1916 , WT/DS136/AB/R, 
WT/DS162/AB/R, adopted 26 September 2000,  para.137. 
8 United States' first written submission, para.33. 
9 US – CDSOA (AB) , para.262. (emphasis in original) 
10 United States' first written submission, paras.20-29. 
11 Ibid., para. 25. 
12 Thailand first written submission, paras.194-198 
13 United States' first written submission, para.22 (emphasis added)  WT/DS343/R 
 Page C-23 
 
 
  added).  The word "suspected" suggests that the fa cts concerning "dumping" or "subsidization" are 
still at an unproven stage.  Therefore, Japan unders tands that Ad Note contemplates a situation before 
the final determination of dumping or  subsidization in the original investigation.  The language of the 
Ad Note "determination of facts  in any case of suspected dumping or subsidization" does not support 
the United States contention that this "determination"  concerns with the final liability for payment of 
duties in a review.  The review, however, does not concern with the determination of the fact, or the 
existence, of dumping or a subsidy.  It merely reassesses the amount of dumping or subsidization.  
The determination in a review, thus, is not related to the "final dete rmination of the facts of dumping 
or subsidization" as set forth in the Ad Note.    
11. Japan considers that the "final determination"  in the Ad Note means that of dumping or 
subsidization as a prerequisite of deciding to im pose antidumping or countervailing duties.  Therefore, 
the measure permitted under the Ad Note should be th e provisional measures to be taken before the 
final determination of dumping or  subsidization, as provided in Article 7 of the AD Agreement or 
Article 17 of the SCM Agreement.   
12. Even in the retroactive system of duty assess ment in the antidumping regime, the United 
States issues the antidumping order, which embodies the administrative decision to impose 
antidumping duties on certain products upon affirmative final determination on the facts of dumping.  
The determination of the assessment of the final duty liability may take place after the review process, 
if a request for a review is made.  The measure purpo rted in the Ad Note, howe ver, is only related to 
the provisional measure to be taken before the issu ance of this order, not after the affirmative final 
determination on dumping in the or iginal investigation, and not even before the completion of the 
final liability assessment in a subse quent review.  This interpretati on equally applies to the imposition 
of countervailing duties. 
13. The United States also quotes the reference to  "many other cases in customs administration" 
to contend that the Ad Note permits the security  requirement for the payment of antidumping or 
countervailing duties apart from provisional measures.14  However, the mere reference to customs 
administration does not give support for an interp retation that the Ad Note would broadly permit 
security requirement, including those imposed even after  the final determination of dumping or 
subsidization.   
14. For the above reasons, Japan submits that it cons iders that the Ad Note gives no legal basis 
for the imposition of the EBR. 
3. Conclusion 
15. Japan respectfully requests the Pa nel to examine carefully the f acts presented by the parties to 
this dispute in light of Japan's arguments above to ensure fair and objective application of the 
AD Agreement and the  GATT 1994. 
 
 
                                                      
14 United States' first written submission, para.25. WT/DS343/R 
Page C-24 
 
 
  ANNEX C - 6 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF  
KOREA 
 
(10 May 2007) 
1. Introduction 
1. This third party submission is presented by the Government of the Republic of Korea 
("Korea") with respect to certa in aspects of the first written submissions by Thailand dated 
20 March 2007 and the United States dated 1 May 2007, respectively, in United States – Measures 
Relating to Shrimp from Thailand  (WT/DS343). 
2. Korea has systemic interests in the interpretation and application of provisions of Article 2.4.2 
of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and 
Trade 1994 ("AD Agreement") , which lay out legal guidelines for investigating authorities of the 
Members in calculating dumping margins in an anti-dumping investigation.  Therefore, Korea 
reserved its third party rights pursuant to Article  10.2 of the Understanding on Rules and Procedures 
Governing the Settlement of Dispute ("DSU") .  Korea appreciates this opportunity to present its view 
to the Panel. 
3. In February 2005, the United States Department of Commerce ("USDOC") imposed 
definitive anti-dumping duties on imports of certa in frozen warmwater shrimp from Thailand.1  In the 
course of the investigation, th e USDOC utilized the practice known as "zeroing" in calculating the 
dumping margins for Thai exporters of subject product.2  Korea believes that the anti-dumping 
investigation conducted by the USDOC against shri mp from Thailand constitutes a serious violation 
of Article 2.4.2 of the AD Agreement.  In Korea's view, this dispute presents a vivid example of the 
distortive nature of the zeroing practice maintained  by the United States for a long time: but for 
zeroing, the USDOC would have been unable to find a margin of dumping in the underlying 
investigation.3 
4. Korea therefore generally supports the argument s raised by Thailand in its first written 
submission.  Rather than covering all the argument s, however, Korea will address in this submission 
certain critical issues in Korea's view.  
2. Legal Arguments 
(a) The USDOC's continued utilization of "zeroing" in  an original investigation on an average-to-
average basis constitutes violation of Article 2.4.2 of the AD Agreement  
5. First of all, Korea notes that in U.S.-Zeroing (Japan), the most recent decision relating to 
zeroing, in which the Appellate Body exercised a comprehensive review of all aspects of zeroing 
practice under the AD Agreement, the Appellate Body  unequivocally held that zeroing in all respects 
violates relevant provisions of the AD Agreement.4  Furthermore, there is an ample body of 
precedents, where panels and the Appellate Body fou nd that the zeroing practice used in average-to-
                                                      
1 See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty 
Order: Certain Frozen Warmwater Shrimp from Thailand, 70 Fed. Reg. 5145 (1 February 2005).  Not only 
Thailand but five other countries were also subject to the concurrent investigations. 
2 See USDOC, Decision Memorandum, Exhibit THA-16, p. 8. 
3 See Thailand's first written submeission in U S—Measures Relating to Shrimp from Thailand  (WT/ 
DS343) (20 May 2007), at para. 4. 
4 See United States – Measures Relating to Zeroing and Sunset Reviews , WT/DS322/AB/R (adopted 23 
January 2007) (" U.S.-Zeroing (Japan) "), at paras. 137-138, 147, 166, 167-169, 177, 186-187.  WT/DS343/R 
 Page C-25 
 
 
  average comparison in an original investigation (tha t is, the first methodology in the first sentence of 
Article 2.4.2 of the AD Agreement) viol ates Article 2.4.2 of the AD Agreement.5  In the underlying 
investigation of this dispute, the USDOC continued to utilize the zeroing prac tice in exactly the same 
manner which has been repeatedly found by the pane ls and Appellate Body to  be in violation of 
Article 2.4.2 of the AD Agreement: it applied the zeroing practice in average-to-average comparison 
in an original investigation.  In  Korea's view, therefore, the Panel could easily reach its determination 
on this issue in this dispute.   
6. This dispute provides a showcase example why and how zeroing distorts an anti-dumping 
investigation.  It has allowed the investigating authority to find a dumping margin where there should 
have been none in the first place.  Once an anti- dumping margin was erroneously found as a result of 
zeroing and duty imposed, another agency of the US government, the Customs and Border Protection 
("CBP"), then imposed a further administrative penalty on Thai exporters in the name of an 
"Enhanced Bond Requirement."6   
7. If there had not been a zeroing practice, there would not have been an anti-dumping order, 
hence, probably, no Enhanced Bond Requirement either .  In other words, this whole dispute simply 
stemmed from the zeroing practice.  As such, Kor ea requests the Panel to find that the zeroing 
practice of the USDOC in an original investigati on in an average-to-average comparison methodology 
is prohibited by Article 2.4.2 of the AD Agreement. 
8. Korea is aware that the United States has announ ced its intention to discontinue the use of 
zeroing when calculating dumping margins on the basis of average-to-average comparisons in original 
investigations.7  Korea hopes that the new calculati on methodology of the USDOC faithfully 
implements the holdings of the panels and the Appell ate Body in future anti-dumping investigations.  
However, (i) given the length of zeroing disputes over the years involving multiple cases, (ii) the history of continued resistance of the United States in implementing the panels' and Appellate Body's 
zeroing decisions, and (iii) the still seemingly existe nt leeway of the investigating authority in 
calculating the dumping margin under the new met hodology, Korea believes it worthwhile for the 
Panel in this dispute to pursue this issue thoroug hly and pronounce its confirmation in an unequivocal 
manner that the zeroing in an original investigati on on a weighted-average-to-weighted-average basis 
violates Article 2.4.2 of the AD Agreement.  
(b) Not only in average-to-average comparison in orig inal investigations, but also in any context 
of dumping investigations and reviews zeroi ng produces inaccurate dumping margins and 
thus violates various provisions of the AD Agreement 
9. In addition, Korea also requests the Panel, in th e course of addressing this issue in the present 
dispute, to confirm the gist of the Appellate Body decision in U.S.-Zeroing (Japan) : the Appellate 
Body's decision was clearly to the effect that zeroing constitutes a violation not only in the context of 
an average-to-average comparison in an original i nvestigation as with the case here, but also in all 
aspects of an anti-dumping administration procedure, including administrative reviews, new shipper reviews, and sunset reviews, regardless of comparison methodologies utilized by investigating 
                                                     
 
5 See, e.g., Panel Report, US – Zeroing (Japan) , para. 7.86; Appellate Body Report, US – Softwood 
Lumber V , para. 117; Panel Report, US – Softwood Lumber V , para. 7.224 and 8.1(a)(i); Panel Report, US. –
Zeroing (EC) , paras. 7.31-32; Appellate Body Report, EC – Bed Linen , paras. 46-66. 
6 Although Korea notes that the Enhanced Bond Requirement itself poses a significant violation of 
Article 18.1 of the AD Agreement , in the interest of brevity, it decides not to discuss this issue in this submission.  
Korea generally supports the argument presented by Thai  in its first written submission regarding the "Enhanced 
Bond Requirement" issue. 
7 See USDOC, Antidumping Proceedings: Calculation of the Weighted-Averag e Dumping Margin 
During an Antidumping Investigation; Final Modification , 71 Fed. Reg. 77722 (27 December 2006). WT/DS343/R 
Page C-26 
 
 
  authorities.  Korea views the decision of the Appella te Body in that decision as pronouncing a blanket 
prohibition of zeroing in any context of anti-dumping investigations and reviews. 
10. So, in reaching a decision in this particular di spute, Korea requests the Panel to discharge its 
obligation taking into account this broad finding of the Appellate Body that zeroing per se  is simply 
prohibited in an AD Agreement.  Korea is aware that  only Article 2.4.2 is implicated in this dispute 
because zeroing challenged here is only the one used in an original investigation on an average-to-
average basis.  The broad finding of the Appellate Body in U.S.-Zeroing (Japan), however, is directly 
relevant in this dispute as well, because it provid es the most recent, the most comprehensive and the 
most reasoned analysis on zeroing, basically wrapping  up all the related issues and controversies in 
this particular area.   
11. As the Appellate Body correctly noted in that dispute, the fundamental problem of zeroing is 
that it produces inaccurate dumping margins and this obvious inaccuracy distorts all aspects of anti-
dumping investigations and reviews.  Thus zeroing-pr oduced determinations in original investigations 
and reviews (including periodic reviews, new ship per reviews and sunset reviews) regardless of 
specific comparison methodologies utilized (whether it is average-to-average basis, transaction-to-
average basis or transaction-to-transaction basis) in evitably constitute violations of various provisions 
of the AD Agreement, such as Articles 2, 9 and 11.  In reaching a decision in this dispute, therefore, 
Korea hopes that the Panel analyses the pr esent case from this broad perspective. 
12. Korea also notes that recent panels reviewing zeroing disputes have made efforts to provide 
consistent and uniform jurisprudence on this volatil e issue, and respectfully requests that the current 
Panel does the same.8  Korea believes that the Panel's decision in this case will be important in that it 
will be able to prompt the United States to halt its continued use of zeroing in any context in future 
anti-dumping investigations and reviews. 
3. Conclusion  
13. For the foregoing reasons, Korea respectfully su bmits that the Panel finds that the USDOC's 
anti-dumping investigation against shrimp from Thaila nd constitutes a violation of Article 2.4.2 of the 
AD Agreement, and recommends that the United Stat es bring the measure into conformity with its 
obligation under the AD Agreement.  Korea apprecia tes this opportunity to present its view to the 
Panel. 
 
                                                      
8 See, for instance, Panel Report, US – Shrimp (Ecuador ), paras. 7.39 et seq.  WT/DS343/R 
 Page C-27 
 
 
  ANNEX C - 7 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF  
MEXICO1 
 
(10 May 2007) 
 
1. Introduction 
1. The Government of Mexico is grateful for this  opportunity to present its views as a third party 
to these proceedings.  Mexico is participating in th is dispute as a third party because its interests have 
been seriously undermined by the systematic app lication by the United States of WTO-inconsistent 
zeroing measures identical to those that are being ch allenged in this dispute.  This practice expressly 
violates the United States' obligations under the WTO Anti-Dumping Agreement.2  The present case 
offers an opportunity to reaffirm these obligati ons and to secure prompt compliance by the 
United States. 
2. Mexico is not taking position on the impositi on of more stringent bond conditions for US 
imports of the subject merchandise in the Wa rm Water Shrimp anti-dumping proceedings. 
3. Mexico would like to share with the Panel a number of observations which it considers 
important to the Panel's decision. 
(a) "consistent line" of Appellate Body Reports have found Zeroing in original investigations to 
be inconsistent with Article 2.4.2, first sentence 
4. The legal conclusion to be drawn concerning the zeroing measures that are before the Panel is 
clear.  As recognized by the United States3, the zeroing model at issue in Thailand's claim involves the 
same type of zeroing procedures that were before the Panel in United States – Anti-Dumping Measure 
on Shrimp from Ecuador .4  In that case, the United States did not contest the inconsistency of its 
measure with the Anti-Dumping Agreement, an d the Panel found the zeroing measure to be 
inconsistent with the first sentence of Ar ticle 2.4.2 of the Anti-Dumping Agreement.  
5. In its first written submission, the United States recognizes that "a measure using a similar 
calculation was the subject of the Softwood Lumber report, and the DSB ruled that the measure was 
inconsistent with Article 2.4.2".5  However, although this was not expressly acknowledged by the 
United States, the same legal conclusions were r eaffirmed by the Appellate Body in a series of 
decisions issued since the report in US – Softwood Lumber V , for example in US – Zeroing  (EC)  and 
US – Zeroing (Japan).   Both of these Appellate Body reports found the zeroing measure to be 
inconsistent "as such" with the obligations of th e United States under Article 2.4.2 and Article 2.4 of 
the Anti-Dumping Agreement because it fails to de termine a margin of dumping for the product under 
investigation taken as a whole.  As recently explained by the Panel in US – Shrimp from Ecuador 
(WT/DS335/R):  
[...] Thus, in our view, there is now a cons istent line of Appellate Body Reports, from 
EC – Bed Linen  to US – Zeroing (EC)  that holds that "zeroing" in the context of the 
                                                      
1 This text was originally submitted in Spanish by Mexico. 
2 Agreement on Implementation of Article VI of th e General Agreement on Tariffs and Trade 1994.  
3 United States' first written submission (DS343) (20 March 2007), paragraph 80. 
4 WT/DS335/R (30 January 2007). 
5 United States' first written submission, paragraph 80. WT/DS343/R 
Page C-28 
 
 
  weighted average-to-weighted average methodology in original investigations (first 
methodology in the first sentence of Article 2. 4.2) is inconsistent with Article 2.4.2. 
We have, as is our duty, carefully consid ered the Appellate Body's reasoning in US –
Softwood Lumber V  and taken into consideration th e consistent line of Appellate 
Body Reports as mentioned in the previous paragraph.  We find the Appellate Body's 
reasoning persuasive and adopt it as our own.  Given that the issues raised by 
Ecuador's claims are identical in all material respects to those addressed by the 
Appellate Body in the Lumber V  case, we are satisfied that Ecuador has made a prima 
facie  case that the use of zeroing by the US DOC in the calculation of the margins of 
dumping for Exporklore and Promarisco, from which were calculated the "all others" 
margins in the three measures identified in its  request for the establishment of a panel, 
is inconsistent with the United States ' obligations under Article 2.4.2 of the 
Anti-Dumping Agreement  because the USDOC did not calculate these dumping 
margins on the basis of the "product as a whole" as it failed to take into account all comparable export transactions in calculating the margins of dumping.
6 
6. The above considerations and reasoning are obvi ously directly related to Thailand's claim 
with respect to the zeroing measure at issue in these proceedings. 
7. Mexico strongly endorses the legal reasoning applie d in the uninterrupted string of Appellate 
Body decisions described above.  In each case, the A ppellate Body has rightly taken as a starting point 
the definitions of "dumping" and "margin of dumpi ng" appearing in Articles VI:1 and VI:2 of the 
GATT 1994 and Article 2.1 of the Anti-Dumping Agre ement.  The Appellate Body has consistently 
determined that the margins of dumping must be calcu lated for each exporter or producer at issue with 
reference to that exporter or producer's sales of the product under investigation taken as a whole.  
These obligations are fundamental, and apply to the calculation of margins of dumping in all 
procedural contexts and in all possible comparison methodologies.7 
(b) There are compelling systemic reasons for this  Panel to follow the Appellate Body's ruling 
8. Although the quality and persuasiveness of th e Appellate Body's reasoning in themselves 
provide sufficient grounds for this Panel to abide by the Appellate Body's decisions, Mexico notes 
that there are also other considerations of consid erable systemic importance that should prompt this 
Panel to adopt the reasoning applied in those earlier decisions. 
9. Article 3.2 of the Dispute Settlement Understa nding identifies the dispute settlement system 
as a "central element" in providing security and predictability to the multilateral trading system. 
10. A panel in a previous dispute rightly pointed  out that "[a]lthough previous Appellate Body 
decisions are not strictly speaking binding on panels , there clearly is an expectation that panels will 
follow such decisions in subsequent cases raisi ng issues that the Appellate Body has expressly 
addressed."8  The Appellate Body supported this principle, inter alia , in US – Oil Country Tubular 
Goods Sunset Reviews , in which it stated that "following the Appellate Body's conclusions in earlier 
disputes is not only appropriate but is what w ould be expected from panels, especially where the 
issues are the same."9 
                                                      
6 Report of the Panel, US – Shrimp from Ecuador, paragraph 7.40 and 7.41. 
7 See, for example, the report of the Appellate Body in US – Zeroing (Japan), paragraph 109. 
8 Report of the Panel in US – Zeroing (EC) , paragraph 7.30. 
9 Report of the Appellate Body, US – Sunset Review of Anti-Dumping Measures on Oil Country 
Tubular Goods , paragraph 188.  WT/DS343/R 
 Page C-29 
 
 
  (c) The Panel should note that the United States has modified its WTO–inconsistent practice, but 
not with respect to initial investigati ons concluded before  22 February 2007 
11. Mexico acknowledges that the United States h as modified its WTO-inconsistent zeroing 
practice in one respect (original investigation us ing the average-to-average comparison methodology) 
by virtue of a notice published in the Federal Register in December 2006.10  However, this change of 
policy does not address the case at issue directly, si nce it applies only to investigations subject to 
determinations made on or after 22 February 2007.  The determina tion in this case was made on 
23 December 2004, which means that, if at all, the United States will change the results in this case 
only with respect to the domestic legal proce dures under Section 129 of the Tariff Act of 1930 as 
amended.  
12. It is regrettable that Thailand has found it necessary to resolve this matter through the WTO 
dispute settlement procedures in spite of the multip le Appellate Body reports that have found this 
practice to be WTO-inconsistent and in spite of the fact that the United States does not appear to 
dispute Thailand's claims with regard to zeroing.  Mexico respectfully requests that the Panel bear 
these circumstances in mind when formula ting its recommendations in the Report. 
2. Conclusion 
13. For the reasons stated above, Mexico asks the Panel to uphold Thailand's claim that by using 
the zeroing methodology with respect to the Warmwater Shrimp  anti-dumping measure, the United 
States has acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement. 
 
__________ 
 
                                                      
10 Antidumping Proceedings: Calculation of the Weighted-Average Dumping Margins in Antidumping 
Investigations, 71 Fed. Reg. 77722 (Department of Commerce) (27 December 2006).